Free Purchase Agreement Addendum Templates

A Purchase agreement addendum is a document attached and made part of the original purchase agreement during its preparation. The document can be information, explanation, or an indication of other requirements not included in the contract.

Once prepared, the addendum is executed as part of the original contract. For instance, a buyer in the agreement may want to emphasize the importance of water rights in their offer to purchase a property.

Although a purchase agreement addendum tends to be confused with an amendment, the two are different. While an addendum is an additional document attached to the contract, an amendment is modified to the terms that were already accepted in the contract. For an addendum to come into effect, it must be signed by both the seller and buyer of the property. After signing, the document is attached to the original contract to show any expansions made to the agreement.

A purchase agreement addendum is added to the initial contract for specific reasons. Depending on the reason for adding extra information to the initial contract, the purchase agreement addendum can be classified into the following types:

Typically, a purchase agreement addendum is a detailed explanation of something not included in the contract. It may also be a proposed change or an elaboration of a point already included in the agreement. Since the purpose of writing an addendum is clarification, a separately signed document is used to avoid any confusion. The following steps summarize the process of creating a purchase agreement addendum:

Obtain the original purchase agreement

Before writing a purchase agreement addendum, the buyer and the seller should obtain a copy of the original purchase agreement. A review of the document will help in establishing what was originally written. It will also be a basis for the proposed changes or additions depending on the effective date and terms. The original contract also provides the reference date upon which the addendum will be based.

Write the addendum

After getting the original contract, the next step is to complete a blank addendum. This can be done using different software such as Adobe PDF or Microsoft Word. You can also use a Purchase Agreement Addendum Template to fill in the necessary details. Starts with the basics, and builds the addendum with relevant information. Remember to include:

• Effective date – The date on which the purchase agreement becomes effective (for reference)
• The parties – Include the legal names of the buyer and the seller, their address, and other personal information.
• Property address – Indicate where the property is located and any other information that described it.
• Addendum – Highlight the adjustment or additional conditions to be included in the original contract.

Parties Make an Agreement and Sign the Addendum

The purchase agreement addendum will only come into effect if both parties agree and sign it. Without appending the document, the addendum is considered void. If either the buyer or the seller does not agree to the additions or changes, the addendum cannot be affected. Other conditions to be highlighted include the disbursement of the earnest money when the seller refuses to sign a deposited earnest money addendum.

Add to the purchase agreement

The final step of creating an addendum is attaching it to the original purchase agreement. This is done after both parties have agreed to the new terms and appended their signs. Once attached, the contract can be executed based on the terms of the original agreement and the additions to the addendum. The document will become part of the original agreement and will be followed until the transfer of property ownership from the seller to the buyer.

Buyers and sellers utilize the purchase agreement addendum in real estate agreements to make amendments to existing contracts. An addendum can be state-mandated disclosure or a document that describes certain aspects of the property being sold. Here are some examples of purchase agreement addendum:

• Inspections: The addendum describes any property inspections to be conducted on the property, but was not included in the original contract. Some of the information added in this type of addendum include the type of inspection to be conducted, deadlines for completing the inspections, negotiations, and any other useful information needed before the inspections can be conducted.

• Water well: This addendum is written when there is a well on the property. It clarifies who will supply supper, including any inspection contingencies needed, the deadline for inspecting, and any actions needed to improve the well.

• Septic: Septic addendums are common in property sale contracts in rural areas. This is because septic systems are a normal part of building and selling properties in rural areas. A septic system is an underground chamber, which could be made of concrete, plastic, or fiber through which domestic wastewater flows and gets treated. It serves as a type of simple on-the-property sewage facility. Given the importance of such as system in a rural property, a septic addendum may be created to cover the terms and deadlines for inspecting the septic system. It may also indicate the type of septic system on the property and the person who will be responsible for paying any changes made to the system.

• Property condition disclosure: The purpose of the property condition disclosure is to indicate the state or condition of the property at the time of sale. The seller completes the disclosure form, indicating any known defects, repairs, or renovations made on the property before the sale.

• Various mandated disclosures: If the property has potentially harmful materials such as mold, radon, asbestos, and lead-based paint, a mandated disclosure is needed. The addendum, in this case, provides more information about these materials and how they can be handled with care. It also highlights safety measures to be taken and any rights the buyer enjoys.

• Sale of another property: If the buyer needs to sell another property before closing the current contract, they will need to write a sell of another property addendum. The document states the deadline for such an arrangement and the course of action to be taken if the property is not sold within the agreed time.

• Property tax disclosure: The property tax disclosure was introduced after repeated complaints about taxes in New Mexico. The addendum aims to protect the buyer from property tax during the transaction. It is usually a requirement in some contracts in which the county fills in the current taxes for the property. This ensures that the buyer understands what to expect so they can take the necessary measures. 

• Homeowners’ Association (HOA): The HOA addendum is written when information about the property’s HOA is needed. The document will include information about the rules and finances of the Homeowners’ Association. This may include an identification of the HOA by name and the due date for submitting financial information and rules restriction documents.

• Real estate contract addendum: The real estate contract addendum is added to a seller-financed deal. The purpose of the document is to indicate the seller’s terms of the mortgage to the buyer. This may include the amount of loan, interest rate, payable amount, and the duration of the loan. It may also indicate whether there are any special arrangements in the repayment of the mortgage.  

• Electronic signature addendum: Sometimes electronic or digital signatures can be allowed in a purchase agreement. The purpose of the electronic signature addendum is to highlight the portion of the contract documents that can be signed this way. It also ensures that the electronic signatures used are legally binding.

• Pet addendum: The pet addendum is associated with the presence of pets on the property. It indicates whether the tenant will be allowed to keep pets at their home and how the responsibility of the pet is defined.